Nigeria: Blakey's Conference - Catalysing Agric Revolution Through Tax Incentives

6 November 2024
Vanguard (Lagos)
By Sunny Ikhioya

Many people are spending their time, energy, and resources to proffer solutions to the challenges of this country, but are government officials listening? A country that cannot feed itself is a slave country, depending on the whims and caprices of fully-fed nations.

This brings to mind a recent seminar on tax, but which dwelt essentially on agriculture. Organised by Okwudili Ijezie and Co., Chartered Accountants, it held on October 10, 2024 at the Banex Mall Lekki, Lagos. The main theme is food which is regarded as a defence tool for any nation. So, what should we be doing about our case?

Akinwumi Adesina, President of the African Development Bank made the following statement on agriculture in Africa: "The future millionaires and billionaires of Africa will not be coming from oil and gas sector, they will be coming from the agriculture sector. But I want African countries to be looking at agriculture as a business, not as a way of life. Nobody smokes gas, and nobody drinks oil, but everybody eats food. So, food is critical, and that is what Africa has a comparative advantage in."

The Blakey tax conference made it clear to us that agriculture is critical to our economy and food security as it employs 30 per cent of the workforce and contributes 24 per cent to the GDP. It was also noted that 80 per cent of Nigerian farmers are smallholder farmers and account for 90 per cent of agricultural produce. Tractor density is 0.27/hectares, which is far below FAO recommended 1.5 hp/hectares. Nigeria's arable land is about 80 million hectares, and only about 34 million are cultivated. Because of the importance of agriculture to our collective survival and growth, it is the opinion of the conference that we catalyse the agricultural sectors.

Blakey Ijezie, in his address, identified the catalysts as follows: Policy reforms. Investment in infrastructure. Technology adoption. Private sector engagement. Youth involvement. Research and development. Extension services. Access to finance. Markets and trade. Climate-smart agriculture. Government support. International cooperation, and not the least: Tax Incentives Edge. These catalysts can spark and sustain an agricultural revolution in Nigeria, driving growth, productivity, and prosperity in the sector.

Tax incentives can be an important edge and catalyst for change towards an agricultural revolution in Nigeria, but they are not the only factor. Tax incentives can encourage investment, boost productivity, support smallholder farmers, promote value addition, foster innovation. However, other factors are also crucial for an agricultural revolution in Nigeria, such as: Infrastructure development, access to credit and finance, policy support and regulatory frameworks, research and development, extension services and training, market access and trade facilitation, private sector engagement and investment, government commitment and support.

Tax incentives can be key enabler, but they must be part of a comprehensive approach that addresses the broader challenges facing Nigeria's agricultural sector. The conference defines agricultural revolution to mean "making it more productive, efficient, and sustainable. This transformation is crucial for Nigeria's food security, economic growth, and social development."

The term "Agricultural Revolution in Nigeria" refers to a transformative period of significant improvement in agricultural productivity, efficiency, and sustainability in Nigeria. This revolution aims to increase crop yields, improve farming techniques, seeds, and inputs to boost production; enhance food security; ensure availability and access to nutritious food for all Nigerians; diversify crops; reduce dependence on a single crop (e.g., oil palm) and promote other crops (e.g., rice, maize, soybeans).

Others include to promote sustainable practices, adopt climate-smart agriculture, conservation agriculture, and organic farming; support smallholder farmers; empower small-scale farmers with resources, training, and market access; encourage private sector investment; attract investment in agricultural value chains and infrastructure; improve rural livelihoods; enhance income and well-being for rural communities through agriculture and related activities. The package also include to develop agricultural value chains; strengthen processing, storage, transportation, and marketing of agricultural products; foster innovation and technology; leverage technology (e.g., precision agriculture, digital extension services) to drive agricultural growth; ensure environmental sustainability; protect natural resources and mitigate the environmental impact of agricultural practices.

The general insecurity in Nigeria, fuelled by various factors such as Boko Haram, banditry, farmers-herders conflict, kidnapping, and IPOB activities, has significantly contributed to food insecurity in the country. The success of our agricultural sector depends on the effective implementation of policies and the involvement of all stakeholders. So, the conference recommended the following tax incentives: Zero-rated VAT on agricultural inputs, 5% VAT on agricultural produce, 10% tax on agricultural profits, tax holidays for agricultural startups. Tax incentives can encourage investment, boost productivity, and support smallholder farmers. They can also promote value addition, foster innovation, and enhance competitiveness.

By providing a supportive environment, tax incentives can help Nigeria unlock its agricultural potential. But, we must also address the broader context of insecurity, which affects food security. The creation of the Ministry of Livestock Development is a step in the right direction, as it will be addressing the farmers-herders' conflict. Tax incentives are crucial in supporting this effort.While many tax incentives are already available, the current attention on them aims to raise awareness among farmers, investors, and stakeholders about existing incentives.

Additionally, it will encourage their utilisation and optimisation, identify areas for improvement and potential new incentives to introduce; support the implementation of new policies and initiatives and foster collaboration between government, the private sector, and international partners. By highlighting these incentives, the goal is to create a conducive environment for agricultural growth, innovation, and investment in Nigeria.

In conclusion, the agricultural revolution in Nigeria requires a comprehensive and coordinated approach. We must work together to create an enabling environment for our farmers so that our agricbusinesses will thrive. We must prioritise security, invest in technology, implement supportive policies, promote climate-smart agriculture, leverage tax incentives, and harness the power of AI. Together, we can make a difference and create a prosperous future for our farmers and our nation.

* Ikhioya wrote via: http://www.southsouthecho.com

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